Los Angeles daily herald. [microfilm reel] (Los Angeles [Calif.]) 1884-1890, 1887-06-06
Thc surplus in the Treasury

The surplus i'm the Treasury
A few DAYS ago we adverted to the
fact that the surplus in the United
states treasury was reaching point
which was placing the business oil
the country in danger. The call re-
Gently made for $19,717 800 OF three
per cent bonds will redeem all the
outstanding bonds which the Govern
ment can legally call in at the pres
emf time. The bonds remaining pay
able are the AZ per cents, redeem
able in 1891, and the 4 per cents re-
deemable in 1907. In the meantime
the immense surplus in the treasury
is being increased by the excessive
revenues OF the Government. We
are therefore brought face to ieee
with this problem. The Federal
absorption Of the money in circuia-
ton must be arrested, or we shall
soon see the business OF the country
seriously affected by stringency
W hich will work widespread rum.
The circulation is rapidly being
contracted because the taxes produce
a very large excess over the ex?end-
itures Of the Government. The reliei
heretofore afforded by calling IN
bonds will not be available after this
for four years. If we go on as we are
going on, there will be an accumula-
ton of between five and six hundred
IN illjons in the treasury before the
time has arrived for making the next
call. 1t is manifest that contrac-
Ii ON of the circulation to nearly one
h alt its healthy volume must result
in a commercial paralysis such as
this country has not witnessed since
1887. We suggested in our previous
article one remedy-for Congress TO
pass a law authorizing the treasury
to buy up unmatured bonds at their
market value. Whether it is
possible to frame law Tor
that purpose which spectators
in Government securities would not
render Intellectual, We have very
grave doubts. On serious reflection,
we cannot see how the Government
agents could successfully buy in the
bonds. The very fact OF the passage
of such a law would send the prem
ium up far above the legitimate
ma,k, for the Government would
h ave to go into the market to buy
the bonds the same as any other bid
der. If the law should place reason
a nable limit upon the premium, the
p rice OF bonds would go above that
limit. If it left the premium optional
wi I'll the Treasury, the price would go
s till higher. But to place optional
power OF this magnitude in any mans
hand would be dangerous, and Con-
gress could not be brought to do it.
Not only would it be dangerous TO
arm a man-however pure and ex-
allied his character-withs SO tremend-
Gus a power, but it would defeat the
object of the Government for, as
there would be no limitation to the
price he might give, so there would
be no limitation to the prem
ium the speculatore would exact.
Hence it is possible that relief in this
direction is impracticable. The wild
propositions about dividing the sur
plus between the States are not to be
seriously thought OF. There is more
practical sense in the suggestion that
the Government enter upon a syste-
matte and extensive expenditure in
the creation OF a navy andin strength
ening our harbor and coast defenses.
But the difficulty about creating an.
efficient navy is in the fact that ma
val warfare throughout the world is
undergoing revolutionary change.
Armored ships made last year are
found to be useless against the i'm
provements in guns and the increased
effectiveness OF explosives this year
Hence, we may be said TO be in the
experimental stage, and cannot fin
ish any class OF vessels with the GER
tainty that they will be the best when
completed. Therefore, the only pru-
dent way in which we can
spend money in naval arma-
ments is in making experiments.
To do this up to the fullest
possible degree will hardly let enough
money loose from the Treasury to re-
lieve the stringency in the circulation.
We might as we'll face the music
bravely, and take the right bull by
the horns. The revenues from inn
port duties and internal taxes are al
together in excess OF the wants OF
the Government. We are levying
war taxes in time OF peace. This
should cease. The tariff should be
revised and greatly cut down. The
internal revenue taxes should bel
( s. "a "a 4 4. IS I. 5.